Wednesday, September 15, 1999 Published at 21:28 GMT 22:28 UKUK PoliticsByers rejects arms hypocrisy claimThe UK has cancelled further Hawk exports to IndonesiaTrade Secretary Stephen Byers has defended the government against allegations of hypocrisy after it emerged his department had been helping to fund sales of warplanes to Indonesia.

MPs expressed outrage when it was revealed that £130m of taxpayers' money had been used over the past year to assist the Indonesian Government to continue with the purchase of British-built Hawk jets.

However, Mr Byers insisted that he had done nothing wrong and rejected claims that the government's commitment to pursuing an "ethical" foreign policy was is in tatters.

He has also defended his approval of a loan to help a UK company working on a vast public works contract in Indonesia.

The row comes as United Nations troops prepare to go to East Timor to deal with the carnage caused by pro-Indonesian militias following the independence referendum in the territory.

The money provided by the Department of Trade and Industry was used to reschedule loans to
allow the Indonesians to buy Hawk jets from British Aerospace and also gave
financial help to UK firms working for the regime in Jakarta.

Mr Byers said he had been simply honouring credit agreements set up by the
previous Conservative administration.

That policy had now been changed and all fresh applications for credit from
Jakarta had been refused this year, he added.

"We have acted properly in all these matters," Mr Byers said.

Asked whether the government's ethical foreign policy was still intact, he
said: "It is an ethical foreign policy which means that we changed the criteria
by which we judge these matters.

"That has enabled me to reject applications for credit for arms."

'Huge hypocrisy'

But the Conservatives accused the government of "huge hypocrisy."

Tory leader William Hague said that the government's claim of an ethical foreign policy
was in ruins

"We've been saying that we should suspend non-humanitarian aid to Indonesia
but actually the government all the time have been extending additional credit
for the purchase of arms.

"No wonder they've been rather cagey about that. I don't know where their
ethical foreign policy stands now, it seems to have disappeared altogether."

'MPs want answers'

The Labour chair of the Commons Trade and Industry Committee, Martin O'Neill, said the Foreign Secretary, Robin Cook, would face some tough questions on arms sales to Indonesia when Parliament returned from its summer break.

The Indonesian military has been accused of colluding with murdering militiamen

He said he believed his committee "was entitled to some answers."

Mr O'Neill said he thought governments, including the current administration, paid more attention to the arms lobby than ethical considerations.

"It was clear for some time that Indonesia was a human rights abuser. When we
came into government we made clear that there would be an ethical dimension to
our foreign policy yet we continued to supply arms,'' she said.

The Liberal Democrats foreign affairs spokesman Menzies Campbell said more effort should be made across all government departments to ensure ethical considerations drive government policy.

The UK has already suspended all arms sales to Indonesia as a result of the violence in East Timor.

'Loan helped poorest'

However, some Labour MPs have also demanded an investigation into the claims that Mr Byers
overrode top civil servants' concerns to authorise a loan of around £1m
to a British engineering company working in Indonesia only weeks before the
militias began massacring civilians in East Timor.

The decision, taken on 19 July, was on top of a £20m loan already
advanced to Va Tech Reyrolle Projects, to help them build power transmission
lines in Indonesia, it was reported.

Mr Byers said: "I took the decision because the application, which was for
less than £1m, would enable the completion of a project to supply
electricity to central Java, helping some of the poorest people of Indonesia.

"To suggest that I have overruled senior civil servants is to deliberately
misunderstand the Export Credit Guarantee Department's rules and ministers'
responsibilities."

However, according to the Guardian which reported the claims the National Audit Office is considering investigating the affair.